The present invention relates generally to a method for making a purchase over the Internet, and more particularly to a method of transacting an anonymous purchase through the use of intermediary credit account information. The present invention also relates to a method for transacting the purchase and use of a cash card and an associated credit account.
Currently, a consumer wishing to make a purchase over the Internet must utilize their personal credit card. Secured servers utilized by online vendors accept credit cards and provide protection, via various encryption processes, for the interception of credit card information by third party “hackers”. However, even if no “hacking” takes place, the vendor ultimately has the consumer's credit card number. Having the credit card number provides a trail back to the consumer's social security number and other private and personal information which the consumer would not normally circulate.
Possession of the credit card number, in effect, gives the vendor the opportunity to circulate information regarding the consumer, including the consumer's history of purchases which may be utilized for mass targeted mailings as well as any other marketing objectives. In addition, by using ones credit card, those purchases made over the Internet that a consumer may otherwise wish to keep confidential appear on the consumer's monthly credit card statement, and thus are available to others having access to the statement. In other words, circulating information relating to the consumer's purchase could prove to be damaging to the consumer. The current mechanism for transacting purchases over the Internet could lead to irreparable harm and embarrassment to one's credit standing as well as one's personal and professional business life. Accordingly, there is a significant need for a means by which a consumer may confidentially make a purchase over the Internet.
Therefore, it is desirable to provide a method of transacting an anonymous purchase through the use of intermediary credit account information. The purchase should be “untraceable” simulating a “cash” transaction which typically occurs in a typical “bricks and mortar” retail setting. This need will continue to grow exponentially as commercial transactions over the Internet continue to grow. Moreover, there is a rapidly growing need for those consumers who do not have access to a credit card to be able to conduct commercial transactions over the Internet. For instance, due to their credit history or age, there are numerous consumers who do not qualify for a credit card account. These types of consumers are fundamentally prohibited from participating in any Internet commerce transaction.
Providing a method of transacting an anonymous purchase through the use of intermediate account information creates many logistical hurdles. Distributing credit accounts and associated cash cards proves to be fairly complicated. In particular, the distribution of a pre-loaded, but yet unauthorized cash card proves to be less than attractive to the average retailer. Retailers desire to have maximum markup on each product sold. Selling $25, $50, $75 and $100 cash cards and associated credit accounts for $32, $57, $82 and $107, respectively, yield a minimal commission and minimal markup to retailers who typically desire a much better markup on inventory.
In order to realize wide spread distribution of cash cards and associated credit accounts, the inventory costs to retailers must be minimized. By way of comparison, prepaid phone cards are often sold at various retail outlets, including drug stores, party stores, department stores, discount clubs, and the like. Pre-paid phone cards, however, simply enable an exchange of currency for phone minutes. Thus, telecommunications companies which distribute pre-paid phone cards can supply them to retailers at a cost much less than a consumer may pay for an equal amount of minutes. That is, a phone card offering 30 minutes having a billable value of $9.00 could be offered to retail outlets by telecommunication companies for $2.00. The retail outlets may sell the phone card for $4.00. This provides a 100% markup on the cost of inventory to the retailer. Any type of analogous transaction for a pre-paid cash card and associated credit account, one the other hand, at best allows an exchange of currency for a cash card and credit account of approximately equal value. Accordingly, no such markup is presently available to retail outlets, thereby making a pre-paid cash card unattractive to the retail outlets. That is, a retail outlet has little incentive to pay $50 to receive $52 for a pre-paid cash card.
Accordingly, it is desirable to provide a method and system of activating a cash card and associated account while minimizing the cost to retail outlets, thereby making the purchase and sale of pre-paid cash cards much more attractive to the retailers.